Atticus knows of Scout's "crime" of being able to read.
On her first day of school, the new teacher, Miss Caroline Fisher, calls on Scout to read the enormous square capital letters that she has printed on the blackboard. As Scout recites these letters, Miss Caroline discovers that she is literate and "looked at [her] with more than faint distaste." She informs Scout that she must tell her father not to teach her any more because "it would interfere with my reading."
Surprised by her teacher's disparagement of her father, Scout returns, "Teach me? ... He hasn't taught me anything, Miss Caroline." She goes on to explain that Atticus is so exhausted in the evenings that he simply retires to the living room, where he reads. But Miss Caroline asks her who did teach her if not her father; then, she instructs Scout to inform her father that he must not teach her to read as it is best to begin with a fresh mind. "You tell him I'll take over from here." She adds that her father does not know how to teach and instructs Scout to sit down.
I mumbled that I was sorry and retired meditating upon my crime. I had been wallowing illicitly in the daily papers. (Ch.2)
That evening Scout asks her father if she can stay home and be educated there just as he was educated at home when he was a boy. But Atticus replies that he has no time to be her teacher; he must make a living. Then, he explains to Scout that she must try to see things from the perspective of others. As a stranger to Maycomb, Miss Caroline must learn some things about "Maycomb's ways," and they must try to understand that she cannot be expected to understand everything right away. He knows, of course, that Scout has done nothing wrong in learning to read.
Discerning that Scout is really troubled that she has been told to no longer read at home with him, Atticus asks her if she knows what a compromise is, suggesting that if Scout will agree to go to school, they can continue reading together. But they should not mention their compromise at school because it could cause trouble with Miss Caroline. Scout agrees.